"I have always wondered to myself that in the last two years with average to moderate governance (economic growth was sub-five percent). India has a capacity to grow by 8-9 percent. If we had followed the best practices and displayed the highest standards of good governance, probably our (levels) of growth would have been more exuberant," he said in his valedictory address at the CAG conference.

Amid investments slowing down and allegation of corruption in allocation of natural resources, India's economic growth had slumped to below 5 percent in 2012-13 and 2013-14.

The economy, however showed signs of rerival as the GDP clocked 5.7 percent growth in the April-June period of the current fiscal, highest in the past 10 quarters.

The BJP led-NDA government, which assumed power in May, had fought the election on the promise of providing good governance to the country.

A recent World Bank report projects India's economy to expand by 5.6 percent this fiscal as reforms gain momentum and the growth is expected to accelerate as proposed measures such as Goods and Services Tax provide a boost to manufacturing sector.

Highlighting the importance of audit, Jaitley said accountability and transparency are essential as it helps in good governance.

"If uncomfortable questions at times were not asked, governance would tend to become despotic and therefore in any system of governance there has to be various laws of accountability and this is in itself an unquestionable proposition," he added.